Australians are missing out on $1.68 billion by failing to switch mortgages, a new study by Heritage Bank and the University of Technology Sydney (UTS) has found.

While 67% of those surveyed recognised the importance of seeking the best deal on their home loan, only a third of respondents actually made the switch. Those that did move to a more affordable mortgage collectively saved around $718 million.

The main barrier for borrowers is the perception that it is too difficult to switch, Jane Calder, general manager of marketing at the Toowoomba-based Heritage Bank, told Australian Broker.

“The survey found that around a third of people think it is too much trouble to switch and a further 28% think that the rewards are just not worth the time and effort,” she said.

“That's despite people being able to save up to $3,000 a year on their home loan – which adds up to a lot of money over the life of a mortgage. Brokers need to make sure people understand that switching is not that difficult and is definitely worth the effort.”

Calder said that Heritage had taken a number of steps which made it easier for borrowers to change home loans.

“Our staff are trained in what they can do to make the process easier, and are experienced in refinancing so they know how to make the process as smooth and simple as possible.

“We're also doing what we can to educate people about the benefits of looking around for the best deal on a home loan, the fact that it is relatively simple, and that the rewards are definitely worth the effort.”